AppFolio End of Year Preparation Webinar Slides

2. Introduction
Presentation Team
Mohamed Hussein, Frisco Miranda, Tyler Guthrie,
Todd Smith
Webinar Length
Approximately 1 hour
Content
AppFolio Year-End Success!

3. Agenda
1 Understand AppFolio End-of-Year
2 Review & Update Information
3 Report & Prepare to Close the Books
4 Answer FAQ’s

4. Please ask questions anytime!
Use the Questions section
of the GoToWebinar panel
On right of desktop

5. FAQ:
• Is this Webinar being
recorded, will I be able
to watch it again
later?
• More FAQ’s Later in
the Presentation
• Yes! This is being recorded and everyone will
receive a follow up email tomorrow with a link
to the recording.
• Please feel free to share the link with anyone in
your organization who could benefit from this
information.

6. Polling Feedback
What Actions Have You Taken to Prepare for Year-End?
• Checked Tax Settings for Owners, Vendors and PM Company
• Reviewed my GL Accounts for 1099 Reporting
• Reviewed Properties for Ownership & Who Pays Vendor 1099’s
• Run Financial Reports to Verify Owner Income & Expenses
• Nothing Yet

8. What Happens at Year-End?
At the end of the year AppFolio will automatically close the books and return
revenue and expense account balances to zero in order to start the new year.
• Starting with zero balances in the revenue and expense accounts each year
enables you to track revenues, expenses, and withdrawals and compare them
year-to-year
• This will be done after the month chosen as the “Fiscal Year End” on the property
page.
As part of the automatic closing process AppFolio:
• Closes the revenue and expense accounts to zero ($0.00)
• All revenue and expense accounts are closed into an account/line item called
Calculated Prior Year Retained Earnings on Trial Balance and Balance Sheet
Reports showing the profit or loss of the operating activities

9. How AppFolio Calculates 1099’s
• Based on Gross Income
(not Net)
• Does not take into
account Expenses or
Owner Disbursements
• Can mark GL account as
exempt from 1099 if not
taxable
• Can adjust filter setting
for minimum income for
Owner

10. Suppressed Fees & Vendor Adjustments
Suppressed Fees: How suppressed fees will show on
cash flow if not zeroed out in the same month:
• Should be paid by end-of-month to show net change of 0.00 in
GL accounts. If they have not been paid out each month, they
will show on 12-Month Cash Flow and Cash Flow reports
• Can be marked as exempt from 1099 reporting
Vendor Adjustments: How Vendor Discounts/Markups
will reflect on Cash Flow:
• Vendor Discounts and Markups will display on Cash Flow
reports
• Reminder: Additional Fees and Vendor Discounts/Markups are
only suppressed from the Owner Statement

11. Manage Mid-Year Migrations for 1099 Reporting
• For Owners: Ensure prior
income and expense was
brought into AppFolio;
otherwise the 1099 will
need to be done in the old
system and AppFolio
(prior and AppFolio)
• For Vendors: If the
vendor 1099 is paid by
owner or portfolio, it will
need to be done from
both systems (prior and
AppFolio)

13. Ensure Data is Accurate
• Vendor & Owner
Tax Settings
• Property
Management
Company Tax
Settings
• GL Accounts for
1099 Reporting
• Who Pays Vendor
1099
• Verify Ownership

14. Vendor & Owner Tax Settings
Need to verify and if needed
update information on Owner
and Vendor Record Pages:
• Taxpayer Name
• Taxpayer ID
• Send 1099? - Checked
• For Vendors:
• If paid by the management
company you will want to
ensure balance forward
financial information is
brought it into the system
(not applicable if paid by
owner or portfolio)
• Only if went live this year –
you will need to use both
systems if you migrated to
AppFolio mid-year

15. Property Management Co. Tax Settings
Ensure accurate company tax
information is set on the
Company Settings Page:
• Company Phone Number
• Taxpayer Name
• Taxpayer ID
• Transmitter Control Code (for
FIRE file only) (instructions
for obtaining this can be
found here)
• Contact Name (for FIRE file
only)
• Access by going to Settings in the top
menu bar, and selecting Company
Settings
• Access to these settings are
managed by user roles

16. Ensure Accounts in 1099 Reporting
• Verify that all accounts to be
included in the owners taxes
are not set to be 'Exempt from
1099 reporting’
• Functionality is found in
Accounting > GL Accounts
• Please note that access to this
functionality is managed by
login permissions
• Account names and numbers
can be edited here if
necessary

17. Update 1099 Vendor Payer on Properties
• Setting is configured on
the Property Page in the
“Owners and Financials”
section
• Can be set as either the
management company,
the property owner, or the
portfolio owner
• If 1099 Payer is set to be the
owner, you will see multiple
1099s for some vendors

18. Verify Ownership
If you have had any mid-year
ownership changes:
• Balances are attached to the
Property, not the owner, so
simply “changing owner
name/info” on property will
not transfer balances
• Ensure that you use the “New
Ownership” Feature to
accurately represent an
ownership change throughout
the year and to properly
report 1099 figures (if you
need the ownership effective
date changed, please contact
support@appfolio.com)

20. Reporting & Data Verification Process
Run Reports & Verify Data
Owner, Vendor & Financial Data
Clean up Data as Needed
Update Owner, Vendor Settings & Financial Data as Needed
Report, Re-verify, & Repeat Till Accurate
Rerun reports and re-verify all data is accurate
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2
3

21. Reports to Verify Financial Information
• There are three reports that can help understand the
tax situation:
• December Cash Flow Report (includes YTD totals)
• 12 Month Cash Flow Report
• The “Cash Flow” and “Cash Flow – 12 Month” report
provide owners with complete amounts for income and
expenses
• Use the filter options to run the report by Property, Group,
Portfolio or Owner
• Be sure to “Show All Properties” to ensure you are also
reporting on any properties that may be hidden
1

22. Use “Send Owner Packet” Process
Use “Send Owner Packet” to
run for all owners at once
1.Select desired date range
2.Leave Owner and
Properties selection blank
3.Select to “Show All
Properties”
4.Select desired report
5.Click Search
6.Click “Preview” links on
results, then print the PDF
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2
3
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5
6
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23. Ownership Changes – Sending Owner Packets
• Because AppFolio reporting is property based, the “Send Owner Packets”
function will not reflect ownership changes that happened throughout the
year.
• You will need to send reports individually to any owners involved in an
ownership change in order to provide accurate figures.
• Creating a property group for all properties that did not go through a change
in ownership will allow you to use the “Send Owner Packets” function for
these properties.
1

24. Reports to Verify Owner & Vendor Info
• Owner and Vendor 1099
Summary Reports
• Reporting Tab > Tasks “1099s,”
Reports section on next page
• Reports may include hidden
owners and vendors with activity in
the current processing year
• Review for completeness and
accuracy
• Check for missing Tax ID numbers
(these are required by the IRS)
• Check for missing addresses
• Validate the send 1099 flag
(vendors)
• If inaccuracies are found, update
information and refresh report
1

25. How to Account for all Properties (Inc. Hidden)
• Ensure report filter is set
to “Show All Properties”
• Filter can be adjusted by
clicking the Filter button
at top of report page
1

26. Make Adjustments & Re-Verify
• Make any needed
updates to add missing
or incorrect information
2

27. Rerun Reports for Owners & Venders
Rerun reports again to ensure
everything is correct
• For Financials:
• December Cash Flow Report
(includes YTD totals)
• 12 Month Cash Flow Report
• Owner and Vendor
Information
• Reporting Tab > Tasks “1099s,”
Reports section on next page
• Reports may include hidden
owners and vendors with
activity in the current processing
year
3

30. FAQ:
• Why doesn’t my 1099
match my Cash
Flow/Income
Statement?
• Make sure that you have selected “Show
All Properties” on your Cash Flow versus
“Show Active Properties”.
• If you have changed ownership at the
property, make sure you filter the Cash
Flow report for that property for the
appropriate date range.
• Remember that some income accounts
may be exempt from 1099 reporting, and
you will need to add Prepaid Rent to all
income not exempt to find the total
amount on your 1099.

31. FAQ:
• Why are there multiple
1099s for some of my
vendors?
• In the “Owners and Financials” section of
each property’s page, there is the option to
specify the owner or management company
as the “Vendor 1099 Payer”.
• If each property lists the management
company here, each vendor will receive one
1099.
• However, if owners are listed as the vendor
payer on some properties, the vendor will
receive a 1099 for each of these owners as
well.

32. FAQ:
• I began using
AppFolio midway
through the year. How
can I edit the amount
generated by the
system?
• You cannot edit the amount on 1099s
generated through AppFolio.
• Best practice is to send one 1099 from
AppFolio and one from your previous
solution.

33. FAQ:
• Why am I seeing
suppressed GL
accounts like
Application Fees and
Late Fees on my Cash
Flow report? Are
those included in
1099s?
• Suppression only affects the Owner
Statement, the Cash Flow shows all GL
accounts that have activity.
• The amount displayed should be zero if
these fees are accurately collected by the
management company, and a zero balance
will not affect the owner’s 1099 balance.
• If you have not yet paid out all of these fees
and you see a balance on your financial
reports, you can mark the accounts as
Exempt from 1099 Reporting to ensure that
your owners are not taxed.

34. FAQ:
• What do you mean by
zeroing out income
and expense
automatically?
• That means that those accounts are reset to a
$0 balance at the end of the year and the
funds in them rolled onto Calculated Prior Year
Retained Earnings line item on the Trial
Balance and Balance Sheet Reports.

35. FAQ:
• Do I have to file by e-
File and if so, how do I
obtain a transmitter
control code?
• The IRS requires anyone submitting more
than 250 forms to submit by e-File (FIRE
file)
• The Transmitter Code (TCC) must be
requested by the IRS at www.IRS.gov
• Approval can take up to six weeks so don’t
wait
• Will also need to setup account with the
FIRE file system at www.fire.irs.gov

37. Summary
1 Understand AppFolio End-of-Year
2 Review & Update Information
3 Report & Prepare to Close the Books
4 Answer FAQ’s

38. Polling Feedback
When will you prepare for End-of-Year?
• Will Get Started Right Away
• By End of November
• By Mid December
• By End of December
• Not Sure

39. Tips for Success
• Start Early: Don’t wait till you are right up against due
dates to begin the process, this will lead to heightened
stress and mistakes. Begin when you still have plenty of
time and you will then be able to work through any issues
without excessive stress.
• Set Aside Dedicated Time: Don’t try to manage your end
of year activities while also trying to handle your day to day
responsibilities. Inevitably you will get distracted and
frustrated making the process more difficult.
• Report Early to Owners & Vendors: Send owners’ and
vendors’ “draft” versions of reports to have them review for
any issues, questions or concerns to avoid last minute
changes and stress during 1099 reporting.

40. Who do I contact about Accounting Questions?
Please contact an Accountant
or CPA

41. Action Checklist
Action 
Start Now – Don’t Wait, Time Flies! ☐
Run Owner & Vendor Summary Reports – Review for Missing/Wrong Info ☐
Add/Fix Info– Tax Information on People & Property Management Co. ☐
Run and Review Financial Reports
• Cash Flow Report for December
• 12 Month Cash Flow Report
• Year End Owner Statements
☐
Add/Fix Info– Financial Information in Income & Expenses ☐
Run, Print and Mail Draft Owner’s & Vendor’s Reports ☐
Relax and Enjoy the Holiday’s, Knowing you are Prepared for Year-End! ☐

42. More Info:
help.appfolio.com
Search “1099”